Last night the Government announced further restrictions in order to reduce the spread of COVID-19.
The Government reiterated its previous advice that only those who must travel to work should do so and that all others should work at home unless they are a key worker. This resulted in some confusion in respect of its application to live construction sites. The Government has further clarified its advice this morning and has said that construction sites can remain open provided that those working on site are able to practise social distancing.
Inevitably, there will be some trades on site that are able to do this and others that are not and this may result in a delay to the completion date. Most standard form contracts such as the JCT provide that the exercise of a statutory power (such as the Government’s directions) are a Relevant Event. Therefore, the contractor will be entitled to an extension of time insofar as it is able to demonstrate that a delay has been caused to the completion date as a result of trades being unable to work due to their inability to practise social distancing. However, standard form contracts such as the JCT do not entitle the contractor to claim compensation arising from the delay in the form of loss and/or expense. This is because the exercise of a statutory power is not a Relevant Matter.
Some employers, at this time, may consider it necessary to intervene and issue an instruction to suspend or postpone the work on site. Employers who do so, in particular those operating under JCT contracts, may be exposed to a claim for extensions of time and an obligation to pay the loss and/or expense, as the employer’s instruction to suspend or postpone may be treated as a Relevant Event and Relevant Matter.
Equally, some contractors may feel need to intervene and suspend work in order to protect the wellbeing of trades on site. In those circumstances, the time and cost consequences of issuing such an instruction will rest with the contractor.
In these unprecedented times we advise employers and contractors to co-operate with each other at the earliest opportunity and to have a sensible and pragmatic conversation about whether it is possible (or not) to carry out work on the construction site safely and in accordance with the Government’s directions and advice.
The current situation is changing on a daily basis and we will continue to keep you updated.
For further details, please contact Mark London, Asif Patel or Matthew Cocklin.